Control of the controversial Barnett Formula – which determines how much money public bodies in devolved states receive from Westminster – should be handed to an independent body, CIPFA has urged. The public sector accounting experts believe the move would temper growing controversy over the continued use of the Formula, which critics claim unfairly rewards devolved states because it adjusts grant distributions according to population, not need. On average, annual state spending in Northern Ireland following the application of the Barnett Formula is £2,200 more per person than in England. In Scotland, residents have over £1,500 more spent on them than in England. Many critics claim the differential has allowed Scotland, for example, to fund universal free prescription charges. They also want Westminster to replace the formula with an alternative that recognises wide variations across England. But in a new submission to a House of Lords inquiry, CIPFA reveals its preference for transferred oversight of the system. Steve Freer, CIPFA chief executive, said: ‘The level of controversy over the application of Barnett has been increasing on all sides since devolution. ‘However, the current system imposes a firm financial discipline and within current economic climate this is needed more than ever. CIPFA's suggestion of the establishment of an independent body to oversee the development of the formula might help to bolster confidence in this important funding mechanism.' Under CIPFA's suggested system, oversight of the formula's maintenance, development and review would be removed from the Treasury and placed in the hands of an independent body similar to Australia's Grant Commission.
